HSBC Says Breakup May Force Banks to Move From U.K.
HSBC CEO Michael Geoghegan
Qilai Shen/Bloomberg
HSBC Chief Executive Officer Michael Geoghegan moved to Hong Kong from London in February as part of the bank’s growing focus on emerging markets.
HSBC Chief Executive Officer Michael Geoghegan moved to Hong Kong from London in February as part of the bank’s growing focus on emerging markets. Photographer: Qilai Shen/Bloomberg
HSBC Holdings Plc, Europe’s biggest bank, and rivals including Barclays Plc and Standard Chartered Plc may be forced to move their headquarters out of Britain if the government decides to break up the banks, said Stuart Gulliver, chairman of Europe, Middle East and Global Businesses.
The conclusion of a government-sponsored commission examining whether banks should separate their consumer and securities units “has significant implications for where we may choose to headquarter our institution and that would also probably be the case for those other two institutions,” Gulliver told a conference in London, referring to Standard Chartered and Barclays.
The British government-appointed Independent Banking Commission, chaired by John Vickers, former chief economist of the Bank of England, is due to report in September 2011. HSBC Chief Executive Officer Michael Geoghegan moved to Hong Kong from London in February as part of the bank’s growing focus on emerging markets.
“I want to be crystal clear though, our preference is to remain headquartered in the U.K. We would hope that there isn’t a conclusion that causes the banks that didn’t actually take any money from any governments anywhere in the world to have to move their headquarters,” Gulliver told the conference organized by Nomura Holdings Inc. “It would be very, very regrettable if that was to take place,” he said.
The bank will also need greater clarity on future regulation before it can raise its dividend, said Gulliver.
“We need more visibility on what the regulatory environment will eventually require,” Gulliver said. “We are bound to end up taking a reasonably conservative approach to capital until we have better visibility.”
Banks are awaiting new rules on capital requirements, known as Basel III.
To contact the reporters on this story: Jon Menon in London at jmenon1@bloomberg.net;
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